Monthly Archives: August 2012

Stock Returns Versus GDP

Frequently, you can hear (or read) that because stock returns have been, on average, materially higher than average US GDP growth rates, there’s a big disconnect and shouldn’t the two roughly match? Hence, doesn’t that mean a new era of long-term lousy stock returns must kick off, forthwith?

Stock returns shouldn’t match GDP growth rates. The two aren’t linked and shouldn’t be–stocks can appreciate at a much faster rate.

Source: Stock Returns Versus GDP